In a changing industry labels adapt and evolve

Labels are at the very core of the music industry and all three major labels are attending Midem in force this year, alongside key independents and label trade associations, including AIM, WIN, BPI, A2IM, VUT, IMPALA, and many more. Gary Smith reports

A RANGE of Midem sessions held in Cannes this week have relevance to the way in which the role of labels is changing. Subjects under discussion include monetisation via stream-ing and sync, A&R, marketing, and the importance of international development. Alongside that, there is a session developed with BMVI, FIMI, SNEP, and European members of Parliament, on the value gap. As Geoff Taylor, chief executive BPI & BRIT Awards says: “The fundamental role of the label — helping artists to realise their creative vision and connect with a wider audience — has remained constant, but the way in which labels do this continues to evolve. Artist development is changing, because breaking artists takes longer in the streaming environment and the focus is increasingly on building the artist brand and audience rather than on promoting a specific album release.

Labels now manage enormous complexity, dealing with many hundreds of digital channels right across the world, and have become expert in understanding and leveraging a huge volume of data to inform marketing strategies and present new opportunities to artists, particularly in the areas of brand partnerships, sync, merchandise and live, and inevitably, the relationship between label and artist has become more flexible, with labels offering different kinds of partnerships.”

British labels have been particularly effective in helping artists to cut through and stand out in an increasingly competitive global market. “In 2015, for example, one in every six albums sold worldwide was by a UK artist and labels are now enjoying the benefits of their transformed business models, with UK trade income increasing by 5.1% in 2016. However, sustainable growth can only be realised if the UK government makes creative businesses a priority post-Brexit. That means making sure British artists can tour freely in EU markets and that our businesses can access the best talent. It also means making clear through our laws that huge online platforms must pay fair royalties for the music they exploit to build their businesses,” Taylor added.

Patrik Larsson, A&R manager at Playground Music — and member of the Artistic Comittee of this year’s Midem Artist Accelerator — agrees with Taylor: “Labels still serve a useful purpose, and especially indie labels are expected to find raw talent early and take a bet on their music, dedicating time, money and resources in trying to get this artist or group to a bigger audience,” he says, “The challenge, of course, is to meet expectations and to balance a long-term way of thinking with the fact that things happen so quickly these days. Now more than ever it’s about telling a story, about selling a true emotion and about building an authentic dialogue online with the right demographic. We see that traditional media and many of the commercial partners we used to depend on to help us break new talent now lean back more and let us do the initial hard work, but once success has come we get their support.”

Mute Records CEO and founder Daniel Miller sees little change in the fundamentals of label life, but elsewhere it’s a different story: “Day to day, labels were and still are a mix-ture of elation and frustration, with many shades of grey in between. There’s no better feeling than releasing a record that you love that clicks with the public, equally there’s no bigger frustration when another record that you love just as much is widely ignored,” he says. “But what really has changed is how income is generated and collected. We are much more dependent on licensing our music for sync, which is the opposite of how things used to be. I remember when no band on Mute would allow their music to be used in an advert, but these days we generate a lot of our income from sponsorships and US TV shows that use our music. Plus, we work with various platforms and brands on the basis that if they support us in making a video, which means we can make a better video, they get an exclusive window. A recent example was Mess On a Mission by Liars for which we teamed up with Urban Outfitters.”

Diego Farias, co-founder & CEO of mobile-only label Amuse, is taking a different approach: “Our mobile service is a one-stop-shop for artists who usually travel a lot, one that works for them whether they are uploading a new track, checking their stats or collecting revenue,” he says. “The whole music sales funnel in 2017 is digital. That means a new way of discovering music, a new way of consuming music and a new way of evaluating sales and success. The artists of today understand the new model and demand transparency. Our way of adapting to their requirements is only to do license deals and to provide fast and ultra-transparent sales data and reporting.

The biggest challenge for labels in the future will be to stay relevant and to offer a service to artists that they really need and want. Staying agile and attentive will be the new mottos to live by.”

Agility is also very much part of Def Jam Recordings CEO Steve Bartels’ mantra: “The entire industry is on an upward trend and the emergence of streaming has opened the door to greater discovery and consumption of music than ever before. We are seeing our projects have a longer life, and that affords us opportunities to be creative and forward-thinking in our strategies,” says Bartels,ß a Midem Keynote speaker this year. “For me it’s been a rewarding and enriching time. Def Jam has now been a stand-alone label within UMG for three years, and we are really beginning to see the fruits of that transition. Throughout the process, I’ve worked closely with, and nurtured relationships with an unparalleled roster of artists and an amazing team of executives. I’ve had access to so much new information, data, analytics, great A&R and team-building, it’s been exciting and rewarding. I’m a positive guy, and I can’t wait for what’s next.”

Like Farias, Mark Chung, member of the board of German trade association VUT, and CEO of Freibank, sees a data-driven future: “A&R decisions have been increasingly driven by data rather than vision. Data, especially when only crudely understood or incomplete, however, provides far better information relating to past performance than to the future,” he says. “Most labels have been reducing exposure to their biggest risk — A&R investments — by signing artists in later stages of their development. This has two effects: a large proportion of the risks and efforts associated with artist development is shifted to publishers and the artists themselves, and labels can often expect only license or distribution arrangements. As to the horizon, the silver lining has been expanding, at least for companies with deep catalogues, and hopefully we will eventually get YouTube to pay a fair share of revenues to creators.”

Richard James Burgess CEO of A2IM also sees data as a game changer: “Our industry has had charts for about 70 years and today this has become an epidemic of data. Accurately interpreting and utilising quantitative information from today’s plethora of sources has never been more demanding on our resources or important for the discovery and development of an artist,” he says. “In a streaming world, labels and artists only generate revenues from recordings for as long as the audience keeps playing the tracks. Promotion is no longer a “first weekend big box office” affair, it’s a continuous process. Understanding who and where your audience is can be critical. Additionally, in a universe dominated by playlists, albums don’t mean as much as they did — the track rules. In five years we have seen artists (Chance the Rapper being the most prominent recent example) achieving commercial success, ostensibly without a label, largely via streaming. Nevertheless, it takes a village to develop an artist whether you call that village a label or not. A2IM has more labels today than at any previous time and we are approached by new indies constantly. These labels can develop out of DIY efforts by artists, songwriters, and producers but, make no mistake, entrepreneurs are still starting labels.”

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